Britannia - Identifying New Product Development Opportunities

Posted in Marketing & Strategy Articles, Total Reads: 2510 , Published on 01 April 2015
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Britannia is one of the biggest FMCG companies in India with products available across various categories. Still general population associates the ‘Ting Ting Titing’ with Good Day and other biscuit varieties. With more than 10 brands available in the biscuit category itself and a strong foothold in the market, Britannia is looking for options to grow in other categories as well and in TOMA awareness of its customers for other offerings as well.


Competitors like ITC, Priyagold, Parle are aggressively building the market. We have taken this topic so as to take a plunge in life of a consultant and understand how they go about the problem statement at hand, what factors do they consider, how they evaluate the choices and give a final decision. We first analysed the problem statement itself and tried to understand the need for Britannia to walk on this road. Once the problem was established and fully understood by us, we looked into new product development opportunities for it. This was done with the help of Brand-Product matrix, financial analysis with intangibles factor evaluation and customer assessment of each brand. This gave us line extension opportunities. Finally, we tried to suggest a new category based on competitors presence in those categories and Britannia’s core competencies.


Each company seeks for growth in the industry that they are in. There are multiple strategic choices that each company has to grow – from related diversification to price war for future, each firm weighs in the dynamics of the industry and accordingly decides its strategic move. Most such moves are risky and many succeed while many fail.



Finding future growth at Britannia:

Britannia Industries limited is food Product Company based out of Kolkata having 38% market share in biscuit industry in India. However, in recent times Britannia had to face competition from players such as Kraft foods and ITC with the brands Oreo and Sunfeast making strong foot hold in India. While Britannia has been competitive, the biscuit industry itself is facing challenges thanks to move from Glucose based biscuit purchases to cookies. In cookie segment, Britannia again is market leader thanks to its Gooday brand but is seeking to find the next growth avenue for itself.


Problem Statement given to us:

What should Britannia do today to find next growth opportunity?

As a consultant, we are required to provide growth strategy to Britannia. Since Britannia is a brand leader in a biscuit segment, we first decided to check the possibility of growth in Biscuit market in India. The following is the landscape that we found with regard to major biscuit brands and their positioning trying to find white space where new/existing biscuit brand can be positioned. Also, Britannia could also enter the spaces where competitor/s are present but it is not (such as Farmlite cookies).


We first started by analysing the market. Since there are only few dedicated biscuit companies in India compared to international conglomerates such as Kraft foods or Indian one such as ITC. We analysed only top 3 players to begin with to see the gaps in market which can be exploited by Britannia. Since Biscuit market is not only defined by the flavours or the type of biscuit but also defined by the positioning. In fact, positioning in FMCG firms becomes a lot more important than any other marketing variable and that is the assumption that we are taking for our further exploration.


Hence, we separated top 3 players including Britannia, Parle and Sunfeast. First we asked one of our focus group members to describe the perceived positioning of all the biscuit brands that were listed. Many of the brands were not recognized. However, on most of the brands which were recognized, respondents tended to have similar views on the positioning. However, the FGD members were from only one segment – MBA students from IIM Kozhikode and hence we did not consider as a representative of population. Therefore, to cross check and add further details to the positioning, we decided to derive positioning from the marketing of all the brands themselves. Using websites and various advertising campaigns, we found the following to be the marketing-positioning strategies of all the biscuit brands under Britannia, Parle and Sunfeast.


As a next step, we decided to weigh in the market growth of the four categories of the biscuits named plain/glucose biscuits, Crème biscuits, Savoury biscuits and cookies. Out of these 4, Glucose remained stagnant in last few years and is expected to even decrease in coming years. On the savoury front as well, growth has been flat industry wide. However, in both Cookies, especially premium segment, as well as in crème segment, growth has been in double digits and thanks to higher margins in these two categories, companies have defocused from Glucose category and to an extent savoury biscuit categories to premium cookies and crème biscuits.


Based on above analysis and considering that we have to match the competition for sustainable growth, we have provide following suggestion for the new biscuit product:

Product category – Luxury/Premium/Indulgence

Product brand – Britannia Pure Magic (against sunfeast dark fantasy and Parle Goldenarchs)

Product Characteristic – since Britannia has already got cakes as well as biscuit production capabilities, we suggest they can have product such as Jaffa Cakes under Pure magic brand name.


However, with the forecasted growth of only 10-20% in biscuits, and considering increasing competition from global and regional players, we are also considering other alternatives that we can pursue.


From the interaction we had with an intern as well as from various other sources, we found that one of the capabilities identified by Britannia is their sales and distribution capabilities. Also, they consider branding as an exercise which adds highest value and is their competitive advantage. Considering this all factors, we explored growth avenues in product categories other than biscuits.


New product development opportunity analysis:

First we try to understand the breadth and depth of all offerings from Britannia by analysing the product categories and the different brands available under them. This portfolio assessment is done with the tool of brand-product matrix. It gives a clear difference and similarities between the parent brand Britannia and its competitors.


From this matrix it becomes obvious that Britannia has 13 brands for biscuits category and thus its fame as a biscuits company is well deserved. Under the dairy products, ready to eat and other bakery products, Britannia has many brands which general consumer may not be aware of. So to determine in which category to grow it is important for us to know what consumers think of these brands wrt to competitor’s brands.


We analysed consumer perception of existing brands through discussion interns and 2 Focus Group Discussions with 7 members and 10 members respectively. This has helped in judging the need for category extensions to generate more brand awareness. The methodology involved naming one brand (without the mention of product category) and letting people discuss what they know about it.


Following were our findings:

1. Britannia: Known for its biscuits, cakes and Cheese and certain dairy products; Many consumers are not aware of bread and rusk offerings

2. Britannia Gourmet: Not many are aware of the separate brand for Cheese, not available at each place

3. Marie Gold: Tea time biscuits; association only with biscuits

4. Bourbon: Association with Chocolate and sweetness

5. Good Day: Premium category cookies; buttery; Tea time and guests serving snack

6. 50-50: Sweet and Salty, easy on pocket, for those who don’t like sweet so much

7. Tiger: For kids, Glucose segment, Healthy, association with low category product

8. Milk Bikis: Milk based biscuit, suitable for kids

9. Treat: Many flavours available in cream, TOMA with jelly on top

10. Pure Magic: Premium segment for cream; name also indicates indulgence category, do not relate it to britannia, TOMA not as strong as ITC offerings

11. Little hearts: Sweet; heart shaped

12. Time pass: Similar to Monaco but lesser association with the salted biscuits category

13. Nice: Good recall among consumers, preferred as evening snacks by loyalists

14. Nutri Choice: Consumer associates this with healthy, fibrous biscuit with lot of oats. Consumers in affluent category and middle aged population

15. Britannia Cookies: Not as relevant in consumers' minds as Good day

16. Healthy Start: Not many are aware of this brand being related to Britannia or the offering

17. TigerZor: New brand in the category, not much recall

18. ActiMind: Similar as Tigerzor

19. Masala Chaas: Limited visibility and hence low recall in consumers


Using the above data and competitor market share we tried to judge Brand Portfolio strength (subjective judgement). This is important so to identify the opportunity where the competitors lack and most importantly the need for brand extensions to establish the TOMA in customers. Everything has been categorized as Strong, Medium or Weak.

Biscuits: Current market leader with maximum brands under the category. Presently facing competition from upcoming player ITC and the very old Parle, Portfolio Strength: Strong

Bread: Faces competition from local players, present under only 1 brand name, Portfolio Strength: Weak

Cakes: Faces competition from local bakeries and other category products like cookies, present under only 1 brand name, Portfolio Strength: Strong

Rusk: Present in only 1 brand, Portfolio Strength: Medium

Dairy Products: Minimal market share due to less perceived association of the product with dairy products from the customers. Opportunity to grow here the maximum due to its robust distribution network and preference for healthy and refreshing nutrients from the consumer, Portfolio Strength: Medium

Ready to Cook: Relatively new in the market. High competition from established players like Nestle, HUL, Frito-Lay, Haldirams. Opportunity to grow present. Portfolio Strength: Weak


1. Biscuits and Cakes have Strong Brand Portfolio; both have many variants too. Hence, we are not suggesting any brand or line extension for both


2. Bread and ready to eat have weak brand portfolios due to higher competition faced and very low awareness about them. However, both categories have limited option for existing brand extensions due to poor fit. They both need new brand extensions but the same may not help in generating brand awareness of existing offerings. Hence, as of now we are not making any changes to current portfolio.


3. Rusk and Dairy products have medium strength for portfolio. Both can leverage the strength of existing Britannia brands. We suggest the following new offerings

• 50-50 rusk: Due to salty perception of 50-50. Rusk also offers similar taste

• Gourmet Butter: Currently Butter is offered in only classic form, Gourmet brand will leverage its imagery to new butter offerings and increase awareness about various cheese variants offered. Thus a win-win for both the new product and the brand

• NutriChoice Spread: Pickle-Tickle, Korma and Sandwich flavored variants. Nutrichoice has been chosen because these spreads are fat free and cholesterol free unlike cheese and butter. Hence, a healthy brand like Nutrichoice will create the required perception and imagery


New Category Development

The final suggestion for a new product is a new category extension. This is as per our judgement as to where the company should expand as its competitors are fast capturing those markets.


New Product Category: Wafer Chocolates

Rationale: One of the primary demand drivers for chocolate and other sweets is consumer taste, and consumers continue to love chocolate. The taste for chocolate is now expanding into highly populated nations with a growing middle class, such as China and India. Rising disposable incomes and changing tastes will continue to drive growth in the industry overseas, just as improving domestic economic conditions increase sales at home. The candy and confection industry remained strong through the recent recession, with the chocolate industry in particular having strong sales despite belt tightening. The industry is expected to grow at a steady rate of 10-12%.


Competitors: One of the major competitors for Britannia is ITC Sunfeast which sells Toffees and eclairs under the Brand name of Candyman. With an established reputation it will be easy for the company to move into chocolates. Another of the competitor Priyagold, majorly known for its biscuits has ventured into chocolates (Snakker) to compete against Munch, Kitkat and Perk.


Core Competency: With an existing knowledge of wafers and biscuits, it will be easier for Britannia to enter in to wafer chocolates rather than pure cocoa chocolates. Also, these chocolates being at lower prices points are preferred by majority of population for munching (rather than indulgence).


Brand Name: These chocolates can be launched under the brand of Pure magic due to its secondary association with Cream biscuits. (Bourbon cannot be used as it is primarily associated with biscuits only). With Pura magic, the problem that can arise is, it may cannibalise the association with cream biscuits in which already Britannia stands much lower than Sunfeast. In this case, Britannia has to decide whether to launch a new brand or stick with existing ones.


This suggestion is purely subjective and we have not done analysis of its financial impact as it is a new product category altogether. However, we believe that the distribution channels can be synergised due to same customers.


Conclusion

As a consultant, the learning that a consultant obtains from one assignment and how those can be applied in different scenarios are immensely important as the quality of the assignment results.


First and foremost difference we understood here is that consulting for future growth is immensely different from consulting for solving specific problems related to efficiency or low performance, however, there could be some overlaps. In the beginning of the assignment, we tried to find growth avenues by exploring “white spaces” in a competitive market through methods of structured market research – both primary and secondary. Based on research, we found that there is still competitive move to be done to counted ITC’s choco-fills and also by further utilizing “Pure Magic” brand, Britannia could strengthen the brand communication as well as brand equity through consistency in product characteristics. Exploiting that, however, we soon realized that sustainable growth by just addressing white spaces I only biscuit category is not possible for Britannia. Therefore, we moved to more elaborate method for finding new product using NPD methodologies. Soon, we found other categories where Britannia’s brand name (input/output view of strategy) as well as capabilities (resource based view of strategy) aligned to allow Britannia to enter into new product category – Chocolates.


Other key learning from the assignment is that it is possible to combine resource view and I/O based view of strategy. One of the way it is done in New Product development process is by way of addressing both external scenarios and internal capabilities at the same time.


This article has been authored by Jignesh Rathod & Pooja Punjabi from IIM Kozhikode


References

1. Johnson M, February 2010, “Where Is Your White Space?”

https://hbr.org/2010/02/where-is-your-white-space

2. Framework – “Strategic innovation” by “Innovation point” a strategic consulting firm

http://www.innovation-point.com/approach.htm

3. Euromonitor: “Passport: Biscuits in India – February 2014”.

4. Marketline Industry Profile: “Biscuits in Asia-Pacific – December 2013”

5. Strategic Brand Management, Keller, Parameswaran, Jacob, 3rd edition, 2011, Framework – “Brand Product Matrix”

6. Intangibles factor analysis, Selecting Profitable products



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